On Jun 12, 5:56*pm, "John A. Weeks III" <j...[at]johnweeks.com> wrote:

- quote -

American Funds have nothing to do with captive agents. To my knowledge
there are NO captive American Funds agents. I choose not to, but I am
appointed to sell AF as well as about 3 dozen other loaded funds and I
am not a "captive agent" of any company.

- quote -

B shares cost MORE than A shares over long periods of time because the
expense ratios, on average, are higher. The risk in both cases is that
the advisor profits from buying and selling, not holding. Is regularly
buying and selling part of your investment plan?

Try this app:
http://apps.finra.org/investor_Infor...a/1/mfetf.aspx

Otherwise, I agree with your post. To the OP, stay away from loaded
funds: be aware of the possible hard feelings that will arise if you
ever become displeased with your friend/advisor; consult a fee-based
financial planner that doesn't profit from selling specific products.

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"John A. Weeks III" <john[at]johnweeks.com> writes:

- quote -

B shares are at least as costly as A shares. The difference is
that the cost is spread out over several years.

Often A shares are the cheapest way to buy load funds if
you are investing enough that you hit one of the breakpoints.
See
<http://www.investopedia.com/articles...kpoints.aspfor some details.

That said, *all* load funds - A, B or C shares - are *very*
expensive ways to get advice. And that's what that load
ought to be paying for - if you're not getting a hell of a
lot of great advice - if you're just buying some funds -
run, don't walk, run away.

In the OP's case, 2+ thousand dollars - plus a cut of all
future additional investments - should buy him a hell of a
lot of great advice from a real planner instead of a
salesman.


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Elle wrote:

- quote -

I did in a follow-up. I got it right eventually.



Brian

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joetaxpayer wrote:

- quote -

Sure. I just wanted to clarify things for him. You're correct that
having a TIRA and Roth shouldn't present any difficulty for the broker.




Brian

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"Default User" <defaultuserbr[at]yahoo.com> wrote
snip; look back
- quote -

Well you drug ;-) the OP down that path by not mentioning
that he can avoid the taxes and have all his funds held at
one institution in a TIRA and Roth IRA. Technically two
accounts but this would all be under his name at the one
institution.

Or if one wants to get technical about it, he could withdraw
his contributions without penalty from the Roth and likely
end up just having the TIRA. All to get "one account." But
this would be silly.

It seems clear to me what the OP wants (or should want, so
as to minimize taxes) is to have all his funds at one
institution in a TIRA and RIRA and which under his direction
will manage it all under his name as if it were one big
portfolio. Which it is.

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In article
<0b079c1c-8b99-4f4d-b04e-5f509e48d041[at]m45g2000hsb.googlegroups.com> ,
Mike <ragamoffyn[at]gmail.com> wrote:

- quote -

RED FLAG. DANGER DANGER Friends and money don't mix. Either be
her friend, or her customer, not don't be a customer because you
are a friend. All that means is that they polite when they screw
you over.

- quote -

RED FLAG. DANGER DANGER She is a captive agent. This is the single
worst way to pick funds. You should be picking funds based on the
companies, sectors, management, returns, or statistics, not on the
fund family.

- quote -

RED FLAG. DANGER DANGER There should be no change for putting money
into a retirement account. In the case of loaded funds, they should
have class B funds where the fees are on a sliding scale and go away
totally when you have the funds in for 5 years or more. A shares are
highway robbery and should be a federal crime. C shares are just as
bad, except you get robbed in the future.

Overall, this plan is great for HER retirement account, not yours.
Run. Find someone else. Put your money to work. Then take some
of the fees that you save and take your friend out to lunch.

-john-

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Default User wrote:


- quote -

Indeed. Not the first post, but an update this morning I must have
missed. I see it now. So Mike needs to understand that to sit in the
same account, the destination has to be Roth. Fair enough. But I doubt
the advisor would object to having two accounts. 4.5% is the same
commission.
Joe

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joetaxpayer wrote:

- quote -

He wanted to combine all the accounts, two 401(k)s and a Roth. Reread
the original message.




Brian

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Elle wrote:

- quote -

Yes, but one of the three accounts he was describing was a Roth.




Brian

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Default User wrote:

- quote -

What? One can rollover from a 401(k) of a previous employer into a
traditional IRA. A Roth has nothing to do with it.

Of course one can convert to a Roth, but that's not part of what must be
done to combine old 401(k)s. Converting 401(k) to traditional IRA has no
tax consequence, if done right.
Joe

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Mike wrote:

- quote -

Well, that's a complicating factor. I'm not sure what the laws are on
contributions to IRAs.

- quote -

Sure. You couldn't have tax-deferred and tax-free money comingled. What
you'd probably want is a rollover (traditional) IRA that was still
tax-deferred, and a Roth. I don't even know if you can do Roth
conversions while living abroad, we're way outside my tiny sphere of
knowledge.

- quote -

Pretty sure. Check though, they might have worked a deal or made an
exception for automatic payments. Check also about rebalancing, where
your broker might sell one fund and buy another, see if there is a load
for those purchases.

- quote -

Ok. The markets are down. So you might be selling funds at a loss.
However, if you move them into something else, that's likely down as
well. In taxable accounts, people are selling and buying something
similar just to harvest the capital losses.

- quote -

You aren't combining funds, but accounts. Accounts hold funds.
Depending on the account custodian, you might or might not be able to
transfer funds in-kind (without liquidating). Accounts opened directly
at a mutual fund company usually only accept cash. That's because they
aren't brokerage accounts. Some, like Vanguard, will also offer
brokerage accounts.

My Roth is at Wells Fargo, a brokerage firm. So when I combined the
Roth that had been at Vanguard with it, the three Vanguard funds came
over without selling.

Definitely go over things with your prospective broker and nail down
the terms, preferably in writing. Especially find out about the loads
for rebalancing and new contributions.




Brian

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"Default User" <defaultuserbr[at]yahoo.com> wrote
- quote -

One can rollover old 401(k)s (where the contributions were
all tax free) to a single Traditional IRA (or multiple
TIRAs, if one wishes) and pay no taxes.

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- quote -

Well, I need to figure that out. I'm living in Norway as of this year
and working for a Norwegian company. That company is taking a
percentage out of my salary, but with the exchange rate between the
kroner and dollar, I'm making a lot that I could contribute to an
account. I'm still trying to figure out whether I can contribute,
though, seeing as how I'm not working for an American company and am
not in the States.


- quote -

Damn. Really? That changes things, then.


- quote -

Damn again. Are you positive? I need to check on that.


- quote -

She'll structure my initial investment and then monitor the
performance of it and my future contributions, reallocating them as
needed. I assume that she'll do that forever, so the AF sales charge,
of which she is given a part, seemed reasonable. However, if that
charge really is applied to all investments, not just the initial
contribution, that changes things.


- quote -

I think the whole dollar thing is a misunderstanding on my part.
Perhaps what I'm getting at is the basic buy-low-sell-high concept. If
combining these funds actually does equate to selling them, then I'd
be selling my shares low -- from what I understand, anyway.

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Mike wrote:

- quote -

Contribute more how? Do you have a current 401(k) that you are
contributing to? At what level? A common recommendation is:

1. 401(k) to the full company match
2. Max out Roth
3. Max out 401(k)

- quote -

I assume both 401(k) accounts are old and eligible for the rollovers
you were asking about.

- quote -

There's a problem. To combine into one account, it would have to be a
Roth. As 401(k)s are tax-deferred that means you'd have to pay taxes on
the $34k in the two rollovers. Do you have the money to do that?
Remember that the additional funds might move you up a tax bracket.
It's best not to pay the taxes out the accounts themselves.

- quote -

For actively managed funds, AF aren't too bad. However, you can
probably do as well or better with passive funds, without the big
up-front load.

- quote -

First of all, where are you going to get that fee? Do you have savings,
or will it come out of the assets? You would need significant
outperformance to make up for that. Also, it's only one-time if you
aren't adding new money, which you should be. You'll get that bite each
time, I'll bet. AF waives the load for reinvestment of distributions,
but not new contributions.

- quote -

Manage how? What about your new or any future 401(k)s? Is she going to
take that into consideration when developing an asset allocation? Is
she going to recommend how you should structure that account?

- quote -

I really don't understand what you mean. The dollar has dropped in
value against foreign currencies. That doesn't reduce the actual amount
of money you have. If you are (as is usual) buying products in the US,
it little difference at all. If you want to take a trip to Europe, then
it hurts. The value of the accounts are whatever your statements say
they are. Stock funds go up and down in value, but it's no surprise
what the value is.

- quote -

It really depends. You can move assets "in-kind" or liquidate and
transfer cash. Either way, you'll have the same amount of money. If you
had taxable accounts, there would be concern that selling would
generate capital gains taxes, but for tax-advantaged accounts that's
not a problem.

This is getting rather long, and I don't want to incure the moderately
rath. I like what Elle had to say.




Brian

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Mike <ragamoffyn[at]gmail.com> writes:

- quote -

Yes. There are funds just as good as American Funds that don't charge
a sales load. For instance, you might look at Dodge & Cox, Selected
American, Longleaf Partners. Or consider index funds or ETFs.

If you think you need financial planning advice, go to a fee-based
financial planner, not a fund salesman.

-Sandra the cynic

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My advice, designed to maximize your retirement savings:

1.
Pick Fidelity or Vanguard to hold everything.

2.
Figure out an asset allocation using the aforementioned
tools. This is not an exact science. E.g. continuing with
the 66 dstocks/19 fstocks/10 bonds/5 whatever breakdown you
have is probably fine at your age. You have a 20-year time
horizon or so until you draw from your retirement, and,
historically speaking, that's been long enough to warrant
being in all stocks or have a conservative (= high grade)
bond allocation to smooth out the volatility of stocks. I
strongly suggest you start a new thread to get suggestions
on an allocation and funds to fill it. Meanwhile, continue
with these steps here.

3.
Tell F or V (whichever you chose) that you want to rollover
both 401(k)s to Traditional IRAs (TIRAs). Have them open the
necessary TIRA account.

4.
Ask F or V what retirement planning services they offer,
especially (a) what is free online and (b) how much they
charge to talk to an adviser. Report back here with
questions as needed.

5.
Sell and buy as necessary to achieve your desired asset
allocation. Buy only low cost ETFs or mutual funds.

6.
Plan for this year. Start a new thread laying out your
retirement investment options (Roth IRA, TIRA, 401(k)?) and
figure out about how much you want to put in each. Give the
amount of the match on any 401(k) you have with your current
employer along with investment choices in that 401(k).

7.
Review your financial standing. How much do you need to save
for retirement (start a new thread as needed)? Do you have
an emergency fund of six months or so of living expenses? Do
you plan to buy a house? What, if any, are your debts? Are
you going to marry and have kids?

8.
In the coming months, consider whether converting (over
several years, say) the Traditional IRAs to Roth IRAs makes
sense for you.

You need to be willing to dig in on the homework a bit here.
A person who has command of his finances is a person who is
more likely to have enough saved for retirement. Your
retirement savings in your TIRA will be in autopilot within
a couple of months, and you can forget about it, for the
most part.

You might like the people at AF but they are robbing you
relative to what other mutual fund etc. companies offer.
AFAIC, find a charity to whom you can give your money,
instead.

Do not sweat losing some money as you sell to get to your
desired asset allocation. In the long run, a proper asset
allocation will pay you the difference.

Disclosure: I am a long-time Fidelity customer only because
I started with them over two decades ago and they have
become more competitive (cost wise) over the years. I am a
huge Vanguard fan when it comes to their mutual funds, ETFs,
web site tools, etc. I own two Vanguard ETFs at present,
held in my Fidelity account. Morgan Stanley may have become
as competitive when it comes to account fees, and if you
think you may like MS instead of F or V, start a new thread
asking for more info. But I am confident F or V will fill
your needs nicely right now.

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On Jun 12, 6:20*am, Mike <ragamof...[at]gmail.com> wrote:
- quote -


First find out if you can actaully roll the two 401K's into IRA's. If
you are still working at the company that sponsors the 401K's you may
not be able to roll them over to an IRA.


- quote -

To a lot of people that's a hefty sale charge to pay, then again
others are OK with it. Since you already have a Vanguard acct., you'd
know that Vanguard funds are very low cost and there are funds that
would do what American funds do for you, and you save 4.5%.


- quote -

This is only true if you are buying Euro based investments.


- quote -

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Hi, all. Thanks much for the advice so far. Here are some answers to
your questions:

I'm 38 with about $50k saved up in retirement funds. Not a lot, I
know, but I'm making a lot more money this year and should be able to
contribute more. I have the following accounts:

Fidelity
$19k
FID Freedom Fund 2040
401k

Morgan Stanley
$15k
different funds
401k

Vanguard
$16k
Target Retirement 2045 Fund
Roth IRA

I think that all breaks down into 66% US stocks, 19% non US stocks,
and 10% bonds. I'd like to combine them all into one account and have
someone with more time/knowledge manage it for me and help me get the
amount to where it should be.

The person I'm working with is a financial and investment planner, and
she's somewhat of a friend of the family. She wants to put the money
into American Funds; I was ok with that. I like AF's management and
incentive structure because I think it reduces the motivation for
cheating on the part of its personnel; and it has a low stock turnover
rate, which I assume means they probably aren't prone to knee-jerk
reactions to the market.

Anyway, AF charges a one-time sales fee to purchase their funds, and
it has to be done through a financial advisor. For amounts over $50k,
the charge is 4.5%. The financial planner gets a portion of that, for
which she'll manage my account and any future contributions until the
end of time.

As for my concerns about the importance of the value of the dollar,
that may be ignorance on my part. I had assumed that a depressed
dollar would reduce the value of my investments, such that if I
purchased $10,000 worth of shares of some company back when the dollar
was high, those same shares might be worth only $8000 or so now. If I
sell them now, then, so that I can combine all my money into one
account, I had assumed that I'd be losing money.

Or am I missing something basic here? Is moving money to a new account
not the same as selling?

Thanks!

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On Jun 11, 3:53*pm, "John A. Weeks III" <j...[at]johnweeks.com> wrote:
- quote -

I concur with one caveat: it is not uncommon to charge a fee for
closing a 401(k) or IRA account. That said, of course $2250 would be
an exhorbitant fee for that purpose. So I that it is.

My suspicion is that it might be a back-end load for the investment(s)
within the 401(k). If that's the case, the OP should consider whether
his target IRA investment (American Fund or whatever) is expected to
do significantly better than the 401(k) investment(s) over the long
term. (Emphasis on "long term".) The OP provides insufficient
information for any intelligent discussion of that here.

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In article
<fdc9190b-58be-4618-8631-aa1820baa47d[at]t54g2000hsg.googlegroups.com> ,
Mike <ragamoffyn[at]gmail.com> wrote:

- quote -

The answer is "NO", it is never a good time to pay a fee of $2250
for anything. IRAs and roll-overs are free. Don't pay for that
service. An IRA should cost $50 a year max to manage, do pay
anyone any loads or fees for what should be free.

-john-

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================================================== ====================

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